The Architect of Amul—M.S. Srinivasan

Can one of the poorest nations in the world become the largest producer of milk in the planet? Dr. Verghese Kurien former Chairman of the National Dairy Development Board showed it is possible. As a professional accomplishment, such achievements are not entirely unique or rare. It is not very difficult to achieve such professional feats through a combination of ruthless target-oriented efficiency, cold-hearted management and soulless technology. What makes Kurien’s accomplishment unique is the way he achieved it –through values, compassion, community, people but at the same time using best technology and management at the service of these higher values. This case study is an attempt to bring out this a unique aspect of Kurien’s leadership in building an institution which brought economic social upliftment to a large number of people at the bottom of the pyramid. This study is based entirely on the autobiography of Dr. Verghese Kurien, “I Too Had a Dream,” Roli Books, New Delhi, 2005.

The Source of Success

Verghese Kurien received the Raman Magsaysay Award in 1963 and the Padma Vibhushan Award from Government of India in 1999. Kurien’s achievement as the architect of India’s “White Revolution” in milk production is well-known in professional and corporate circles. In the Foreword to Kurien’s autobiography Ratan Tata, Chairman of the Tata group, sums up the achievement of this great institution-builder of modern India.

“All of us should be proud of the achievements of Dr. Kurien. A true visionary, he built a series of institutions which made India the world’s largest milk producer, developed a logistic chain to produce and deliver hygienic and nutritious milk to millions and created the world’s largest food marketing business and the country’s largest food brand (Amul). He enabled India to nearly double its per capita milk availability and made India’s dairy industry the largest rural employment provider. The cooperatives he created have also become powerful agents of social change to empowering women and in embedding democracy at the grass roots level in the country.”

What is the main source of Kurien’s success as a leader? As we have indicated earlier, it is not entirely technology or management but using them at the service of people. In the following passage from a letter to his grandson, Kurien spells out categorically what are the main sources of his success.

“I would like to stress even more strongly that my contributions have been possible only because I have consistently adhered to certain core values. Values that I inherited from my parents and other family elders; values that I saw in my mentor and supporter here in Anand -Tribhuvandas Patel. I have often spoken of integrity as the most important of these values. — always use your talents to the best of your ability and contribute somehow to the common good. — I hope that you too, will discover, as I did, that failure is not about not succeeding. Rather, it is about not putting in your best effort and not contributing, however modestly, to the common good.”

Value, integrity, contribution to the common good—there are the factors of success not only of Kurien but some of the universal factors which leads to lasting and sustainable success in the long-term.

The Making of Transformational Leader

A leader, however great she may be is not an isolated island. Her vision and values are shaped not only by her own intuitions and perception but by her mentors and other influence. Any good profile of a leader must provide some understanding of the influences that shaped the leader’s vision and values.

The Kurien was born to highly educated Syrian-Christian parents. He did his graduation in Loyola College. As a student, he excelled in both studies and sports, joined the Cadet Corps and admired the military discipline. These tendencies indicate the natural instincts of a balanced personality, which is one of important qualities of an effective leader.

After graduation he went to US for higher studies under the scholarship of Government of India. After spending a few happy years in US, Kurien returned to India with assorted qualifications in metallurgy, nuclear physics and dairy engineering. The Government of India offered him a job in Anand in Gujarat as a dairy engineer. After tasting the luxurious life in US, Kurien was unwilling to take the job in some god-forsaken village in India. But the government officer told Kurien that if he refuses to take the job he has to return the money spent on his education or else face legal action. Kurien agreed reluctantly. He came to Anand in Gujarat and joined as a dairy engineer in Government of India Research Creamery. But Kurien was dismayed at the utter inefficiency, lethargy and indolence prevailing in this government research institute. He makes some attempt to bring some life to the institution with his technical skill and initiative like for example repairing outdated machinery, trying to produce milk cream and selling to biscuit factories. But he found nothing works and the situation hopeless. He decides to quit. At this point he meets his future mentor Tribhuvandas Patel, who was trying to organise the milk produces in Anand into an independent cooperative, free from all forms of exploitative interference. Kurien traces this idea or vision back to Sardar Vallabhai Patel who advised the highly exploited milk producers of Kairala in Gujarat to organise themselves into cooperatives. In his following observations on Sardar Vallabhai Patel, Kurien sums up more or less a part of his own vision which gave birth to the Amul Cooperative.

“Kaira’s farmers complained about their exploitation to Sardar Vallabhai Patel, a prominent leader of the freedom movement and Deputy Prime Minister of independent India, who came from Karamsad village just a few kilometers from Anand.– He firmly believed that a revolution in marketing the farmers’ produce – which would be beneficial to the farmers – was necessary. Sardar Patel was convinced that in order to save themselves, the farmers needed to control the procuring, processing and marketing of milk.– Sardar Vallabhai Patel’s vision has always been a source of great inspiration., After fighting for and winning freedom– Sardar Patel urged the dairy farmers to organise milk cooperatives, which would give them control over the resources they generated.”

As Kurien mentions in his letter to his grandson, Tribhuvandas Patel is a major influence that shaped his values. Here is a rare breed among politicians who was honest, dedicated and selfless. He was a powerful and influential congress politician who used his power not for self-glorification but for serving people. He tirelessly travelled from village to village and organised the milk producers into five cooperative societies under the joint name Kaira District Cooperative Milk Producers Union Limited. The following passages from Kurien’s biography, brings out the character of Tribhuvandas Patel.

“When I first began working with Tribhuvandas, the farmers and the cooperatives, I had not dreamt in my wildest dreams that this unusual combination of talents and strengths would revolutionise dairying in India. At that critical formative stage of the Kaira Union, Tribhuvandas was the main reason the experiment worked. He was the Chairperson of the cooperative and because he was at the helm, no government or political interference was possible. During those days when the Congress Party ruled without challenge, he was an influential Congress leader in Gujarat. His opinion carried great weight when the party named ministers and members of Parliament from the region. However, so clear and unshakeable were his priorities that if any politician even tried to put as much as a finger on the farmers’ milk cooperatives, he would have cut off their entire hand. The rest of us watched and learnt.”

The young Kurien was deeply influenced by the honesty and dedication of Tribhuvandas. “In the moths that I had known him” writes Kurien in his autobiography, “I had come to realise that he was an exceptional person of tremendous integrity and totally committed to the cause of the farmers. I considered it an honour to with him.” Tribhuvandas had the dedication and the ability to organise the farmers into a cooperative community. But he didn’t have the technical knowledge and the professional competence to make it into a viable organisation. And Kurien came precisely with such competencies which Tribhuvandas was lacking. So, when Tribhuvandas asked Kurien to stay and work with him, Kurien was unable to resist request. And they became a formidable team. As Kurien describes what made him take the final decision to stay in Anand.

“Tribhuvandas gradually involved me deeper and deeper in the workings of the cooperative. He told me that he needed my professional skills to operate and manage the dairy for the farmers and that the farmers would be grateful if I were to stay on at Anand. It was his vision that made him quick to motivate professionals like me to contribute our services to build farmers’ cooperatives. It was my fortune, or fate, call it what you may, that Tribhuvandas took a fancy to me and that I recognised an opportunity in what he was asking of me. An opportunity not only to serve myself but also to work for the larger good. This is one of the most important lessons in life that I was to learn. Working with Tribhuvandas and Kaira’s dairy farmers, I saw that when you work merely for your own profit, the pleasure is transitory; but if you work for others, there is a deeper sense of fulfillment and if things are handled well, the money, too, is more than adequate.”

We can see here an example of higher motivation and transformational leadership. According to the leadership guru McGregor Burns, a transformational leader is the one who can awaken higher motives in others by his or her own living example. Tribhuvandas is such a transformational leader who created another transformational leader in Kurien. He transformed the young, fun loving, westernized and career-minded engineer into a dedicated leader for a higher cause. The following words of Kurien bring out vividly the excitement and inspiration he felt in building something which leads to the betterment of people’s lives.

“In 1950 when I formally joined the KDCMPUL as General Manager, we were a newly-independent nation. Our cooperative was helping to bring economic independence to the dairy farmers of Kaira district. There were so many things to do, so many challenges to overcome, so many opportunities to seize. We felt exhilarated from knowing that what we were doing was important – crucial for our farmers and for the new nation. The greatest satisfaction and joy came from the priceless reward that comes when farmers whose lives depend on your efforts appreciate what is being done for them. For me, helping to build and shape a cooperative owned and commanded by milk producers has always been the greatest reward.”

Professionalism at the Service of People

Tribhuvandas gave an initial outer form to Sardar Vallabhai Patel’s vision of organising the farmers into a cooperative community. But this commendable work of the political leader would have remained as another inconsequential cooperative had not Kurien brought a contemporary economic, technological and social dynamism to the Patel’s vision and Tribhuvandas’s organisation. Kurien’s vision has a techno-economic and social dimension. Let us first look at the techno-economic vision of Kurien.

The Kaira cooperative, according to Kurien, has to be run on business lines with the most advanced technology and highest professional competence which brings maximum economic benefits to the farmer who owns it. The dividends and benefits of technology and professionalism must go entirely or most of it to the farmer who are the owners and not to the executives who manage it. Thus Kurien infused corporate dynamism into a grass-root people’s organisation but without allowing the commercial motive to overshadow the human objectives. Kurien emphasised constantly that as the Chief executive of Kaira Cooperative, he was just an employee of the farmers who owned the cooperative. As Kurien describes his economic vision for Kaira cooperative:

“The more I worked with Kaira’s farmers and the more I saw the hard life they and their families led, the more committed I became to their cause. As the Chief Executive of their cooperative, my main goal became to ensure the best deal for the farmers, within my capacity, without exploiting the consumer. The best way to do this was, of course, to give the consumer products of extremely high quality and that is what we at Amul worked hard to do.

From the very beginning I was convinced that a cooperative, too, must be a business enterprise and it has to run as a business enterprise. If a cooperative forgets this, it will fail; it will collapse. I ensured from the start, therefore, that Amul always operated as a business enterprise – but at all times keeping in mind that the business was to maximise the price paid for the milk, not in order to maximise the dividend, as is the case in the private sector. We did this by manufacturing value-added products which allowed us to give farmers a higher milk price every year.”

This requires expertise in marketing. So Kurien used professional marketers and advertisers for branding and advertising the product of the Khaira cooperative. Thus was born the Amul brand which became a household name in India for milk product. This is something which was never done in the cooperative sector in India. But Kurien believed firmly that it is necessary for making the cooperative into a sustainable business organism which delivers consistent economic benefits to the farmer. As Kurien explains further:

“Very soon I was convinced that one of our key areas of concentration would have to be marketing of these products. One of the earliest lessons I had learnt was that Amul existed because, barely a few hundred kilometers away, Bombay existed. There could be production here only because a market was there. There could have been no production of anything unless it was marketed at a price advantageous to those who produced it, which provided them with an incentive to produce more and more.”

In converting this vision into reality Kurien and his team have to overcome many challenges and obstacles which contain important lessons for effective leadership. The first lesson is not to be overawed by the challenges however difficult or even impossible they may appear to be. The first major challenge Kurien faced is to convert buffalo milk into milk powder. For most of Khaira farmers owned buffalos and not cows. And according to expert opinion buffalo milk cannot be converted into powder. But Kurien and his team-mate and dairy expert, Dalaya, refused to meekly accept the opinion of experts. They took the challenge head-on, flexed their technological muscles, experimented with different possibilities and finally succeed in solving the problem. Here is the second lesson on leadership: not to be swayed too much by expert opinion, especially foreign experts. The following remarks of Kurien on the hidden motives behind the opinion of foreign experts are worth pondering by Indian leaders who are placed in a similar situation.

“I was to learn yet another valuable but sad lesson: that the technical advice of ‘experts’ is all too often dictated by the economic interests of the advanced countries and not by the needs or ground realities in developing countries. Without exception, technical experts from England and New Zealand told us that buffalo milk could not be converted to milk powder. We showed them how it could be done.”

The UNICEF agreed to provide financial assistance to the project. But this requires approval from the milk commissioner of Bombay, Khurody who was sceptical and produced letters form experts all over the world to show how impossible it is. But Kurien and Dhalia gave a living demonstration in the presence of Khurody and UNICEF representatives. As Kurien describes:

“The next day we met at the Andheri laboratory where Dalaya and I proceeded to convert the buffalo milk into milk power. Khurody was still sceptical. ‘But what about its solubility?’ he demanded. I was prepared for this question. I simply added the milk powder to a beaker of distilled water and it dissolved completely. ‘But what about its taste?’ Khurody persisted. I promptly offered the reconstituted milk to Dinkarrao Desai who sipped it and said it tasted absolutely fine.”

Here is another lesson on leadership. When nay sayers insist that it was impossible the only way to convince them is to give a living demonstration it can be done. Here, Kurien has done exactly what the inventor of railway engine had done. The coach with the engine was in the railway track for demonstration. All the experts in the station were asserting how it would never work. The great inventor entered calmly into the coach and pulled the lever. The coach started, moving picked up speed and disappeared from the stunned gaze of experts!

And finally, after overcoming many obstacles, the plant for converting buffalo milk into milk powder was successfully commissioned by Kurien and his team, which was the first and the only plant of this kind in the world. The plant was inaugurated by the then Prime Minister of India, Jawaharlal Nehru who embraced Kurien and said: “Kurien, I’m so glad that our country has people like you—people who will go ahead and achieve even that which seems unachievable.”

But Kurien’s vision is not just about technology. The other more important part is his social or developmental vision. We have already mentioned about the Sardar Patel’s views on cooperatives which is one of the inspirational sources of Kurien’s developmental vision. The other source could be some of the more progressive development thinkers of our age like Barbara Ward, whom Kurien mentions appreciatively in his autobiography. In fact Kurien states in his autobiography that Amul cooperative is an attempt to translate Patel’s and Barbara’s vision into reality. The core idea is that people who produce things like the farmer has to own the resources and the organisation; empowered to participate in decision-making; provided with the right instruments of development; and finally reap fully the benefits of development without the interference of middlemen. As Kurien articulates his developmental vision which nurtured the Amul cooperative:

“What then was the Kaira Cooperative? It was certainly not only about milk. It was very soon becoming an instrument of social and economic change in our rural system. It was evolving into a programme that involved our farmers in their own development. This I learnt very early on through my years of working closely with Tribhuvandas and the farmers of Kaira district: true development is not development of a cow or buffalo but development of women and men. However, you cannot develop women and men until and unless you place the instruments of development in their hands, involve them in the process of such development and create structures that they themselves can command. What, therefore, is a government at its best? It is a government that governs’ least and instead finds ways to mobilise the energies of our people.”

Kurien believed that professional management is an instrument of development. But it is only an instrument and not the aim or end in itself. Professionalism has to be put at the service of people. As Kurien explains:

“Today India is among the most industrialized nations in the world. How did this happen? It happened because we combined our native shrewdness and the money our great industrialists had with professional management. I was convinced that the biggest power in India is the power of its people – the power of millions of farmers and their families. What if we mobilized them, if we combined this farmer power with professional management? What could they not achieve? What could India not become?”

Building Grassroot Democracy

This brings us to the question how to implement this vision? Kurien’s answer, which he learnt from his mentor Tribhuvandas, is a decentralized grassroot democracy. Tribhuvandas and Kurien built a three tier democratic organisation for producing and selling Amul milk products. The first tier is the village level milk collection centres. The second tier is the district level diaries which converts milk into saleable products. The third tier is the city level marketing centres. As Kurien describes the organisation of Amul Cooperative:

“Village matters would be handled by village societies. Milk would be collected by people of the villages; at the district level the dairies would be handled by the district unions; at the state level the marketing would be taken care of by the marketing federations. In our dairy cooperative structure, the production of milk is kept in the hands of the small farmers, the marginal farmers and landless labourers. The entire structure, therefore, fits in with the spirit of India, of a decentralized, rural economy. The cooperative structure never encourages huge, bureaucratic systems, for it knows that mammoth bureaucracies cannot be sensitive to the needs of people.”

Amul cooperative is a democratic organisation. In 1946 Tribhuvandas Patel began this experiment modestly with two cooperative societies and a couple of hundred litres of milk. Today, Anand alone has a district cooperative union with 1,017 village cooperative societies federated into it. Each village has its own cooperative milk society and the farmers become members of their village cooperative. That village cooperative is guided by a managing committee elected by the members. The chairmen of each of these managing committees form the general body of the district cooperative union of Anand. And that district union owns the plant. The general body elects their board of directors to guide and oversee the management of the district union and the dairy plant. The state is responsible to the district which, in turn, is accountable to the village cooperatives which are accountable to their current 573,962 farmer members in Kaira’s 1,017 villages. The quantum of milk collected per day today is 7.39 lakh litres.

The profits generated by the production and selling of milk products are distributed equitably among farmers doubling the family income. The collection centres operate on first-come-first-served basis, irrespective of economic and social status. Rich and the poor, man and woman, Brahmin and the harijan, high and the low have to stand in the queue together, which leads to a certain leveling of the social inequality. A woman who take care of the cattle and produce milk, sell it to the cooperative and as a result, sometimes earn more than their husbands who may be a marginal farmer. A team of dedicated veterinarians provide free medical service to the cattle at the door step of the farmer. Similarly, health care centres provide free medical help to the farmer and his families.

Kurien launched and executed a nation-wide project called “Operation Flood” for replicating the Amul model all over India, which made India self-sufficient in milk.